HP 2014 Annual Report Download - page 172

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 15: Litigation and Contingencies (Continued)
business and by authorizing HP’s repurchase of its own stock on August 29, 2010 and July 21,
2011. The lawsuits are currently stayed pending resolution of the Espinoza/Salat consolidated
action in federal court. The court held a status conference on November 17, 2014.
•Cement & Concrete Workers District Council Pension Fund v. Hewlett-Packard Company, et al. is a
putative securities class action filed on August 3, 2012 in the United States District Court for the
Northern District of California alleging, among other things, that from November 13, 2007 to
August 6, 2010 the defendants violated Sections 10(b) and 20(a) of the Exchange Act by making
statements regarding HP’s Standards of Business Conduct (‘‘SBC’’) that were false and
misleading because Mr. Hurd, who was serving as HP’s Chairman and Chief Executive Officer
during that period, had been violating the SBC and concealing his misbehavior in a manner that
jeopardized his continued employment with HP. On February 7, 2013, the defendants moved to
dismiss the amended complaint. On August 9, 2013, the court granted the defendants’ motion to
dismiss with leave to amend the complaint by September 9, 2013. The plaintiff filed an amended
complaint on September 9, 2013, and the defendants moved to dismiss that complaint on
October 24, 2013. On June 25, 2014, the court issued an order granting the defendants’ motions
to dismiss and on July 25, 2014, plaintiff filed a notice of appeal to the United States Court of
Appeals for the Ninth Circuit. On November 4, 2014, the plaintiff-appellant filed its opening
brief in the Court of Appeals for the Ninth Circuit.
Autonomy-Related Legal Matters
Investigations. As a result of the findings of an ongoing investigation, HP has provided
information to the U.K. Serious Fraud Office, the DOJ and the SEC related to the accounting
improprieties, disclosure failures and misrepresentations at Autonomy that occurred prior to and in
connection with HP’s acquisition of Autonomy. On November 21, 2012, representatives of the U.S.
Department of Justice advised HP that they had opened an investigation relating to Autonomy. On
February 6, 2013, representatives of the U.K. Serious Fraud Office advised HP that they had also
opened an investigation relating to Autonomy. HP is cooperating with the three investigating agencies.
Litigation. As described below, HP is involved in various stockholder litigation relating to, among
other things, its November 20, 2012 announcement that it recorded a non-cash charge for the
impairment of goodwill and intangible assets within its Software segment of approximately $8.8 billion
in the fourth quarter of its 2012 fiscal year and HP’s statements that, based on HP’s findings from an
ongoing investigation, the majority of this impairment charge related to accounting improprieties,
misrepresentations to the market and disclosure failures at Autonomy that occurred prior to and in
connection with HP’s acquisition of Autonomy and the impact of those improprieties, failures and
misrepresentations on the expected future financial performance of the Autonomy business over the
long term. This stockholder litigation was commenced against, among others, certain current and
former HP executive officers, certain current and former members of HP’s Board of Directors, and
certain advisors to HP. The plaintiffs in these litigation matters are seeking to recover certain
compensation paid by HP to the defendants and/or other damages. These matters include the
following:
•In re HP Securities Litigation consists of two consolidated putative class actions filed on
November 26 and 30, 2012 in the United States District Court for the Northern District of
California alleging, among other things, that from August 19, 2011 to November 20, 2012, the
defendants violated Sections 10(b) and 20(a) of the Exchange Act by concealing material
164